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Investment, Wages and Ownership During the Transition to a Market Economy: Evidence from Slovenian Firms

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Author Info
Prasnikar, Janez
Svejnar, Jan

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Abstract

Given the concern about restructuring and the role of insiders during the transition, we analyse the determinants of (and trade-off between) investment and wages in Slovenian firms. We find that investment behaviour is more consistent with the imperfect capital market (internal funds) hypothesis than with the neoclassical or accelerator models. Firms also display a trade-off between investment and wages, and workers share in firms’ surplus and appropriate funds that are supposed to be used for depreciation investment. Most findings are consistent with the principal theoretical models of restructuring. The models, however, underestimate the power of (elite) managers to restrain worker demands and overestimate this power on the part of external owners.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 4144.

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Date of creation: Dec 2003
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Handle: RePEc:cpr:ceprdp:4144

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Related research
Keywords: investment; ownership; restructuring; wages;

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Find related papers by JEL classification:
C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data
D92 - Microeconomics - - Intertemporal Choice and Growth - - - Intertemporal Firm Choice and Growth, Investment, or Financing
J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
P20 - Economic Systems - - Socialist Systems and Transition Economies - - - General

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  14. Prasnikar, Janez, et al, 1994. "Behavior of Participatory Firms in Yugoslavia: Lessons for Transforming Economies," The Review of Economics and Statistics, MIT Press, vol. 76(4), pages 728-41, November. [Downloadable!] (restricted)
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  19. Burda, Michael C, 1992. "Unemployment, Labour Market Institutions and Structural Change in Eastern Europe," CEPR Discussion Papers 746, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Lubomir Lizal, 2001. "Does a Soft Macroeconomic Environment Induce Restructuring on the Microeconomic Level during the Transition Period? Evidence from Investment Behavior of Czech Enterprises," Development and Comp Systems 0012010, EconWPA. [Downloadable!]
    Other versions:
  2. Polona Domadenik & Lubomir Lizal & Marko Pahor, 2003. "Effect of Enterpise Break-Ups on Performance: Case of Former Yugoslav Republic of Macedonia," CERGE-EI Working Papers wp216, The Center for Economic Research and Graduate Education - Economic Institute, Prague. [Downloadable!]
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